BAE Systems is partnering with air-breathing rocket developer Reaction Engines as part of an agreement under which BAE will acquire a 20% share of the U.K.-based company for £20.6 million ($31.8 million).

The surprise announcement represents a key breakthrough for Reaction in its efforts to attract major aerospace investors to accelerate development of the Synergetic Air-Breathing Rocket Engine (Sabre) combined cycle propulsion system aimed at bridging the power gap between air breathers and rockets. BAE’s move marks another apparent vote of confidence in the pre-cooler technology at the heart of the Sabre cycle, which earlier this year received independent validation from the U.S. Air Force Research Laboratory.

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